After a show of resilience over the past few weeks, the Ethereum price finally gave way, falling below the $2,000 level for the first time since March 10th. The “King of Altcoins” succumbed to the downward pressure that spread across the global financial markets on Friday, March 27th, as the geopolitical tensions in the Middle East rage on.
With rising oil prices due to the supply shock driven by the partial closure of the Strait of Hormuz, inflation expectations across various world economies are rising rapidly. Specifically, the fear of inflation seems to have triggered the ongoing chatter about a potential hike in interest rates by the United States Federal Reserve, leading to a drop in crypto prices.
$111 Million Flushed Out Of The Market In ETH Long Liquidations
On Friday, the Ethereum price fell to a two-week low just below the critical $2,000 level, as the entire cryptocurrency market continues to struggle against the latest wave of bearish pressure. As the price of ETH slumped to this low, Bitcoin, the world’s largest cryptocurrency by market capitalization, also dropped to around $65,500 on the day.
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According to recent market data, this Ethereum price decline below $2,000 was accompanied by significant long liquidations of more than $110 million. With the altcoin losing such a critical support level, it is not totally outrageous to expect further decline over the next few days, especially considering the sluggish market climate.
However, investors might want to look out for the Ethereum price close at the end of the week before making any conclusion. If there is a convincing close below the psychological $2,000 support, then the cryptocurrency stands at the risk of further decline, potentially to as low as the $1,750-$1,850 support region.
As of this writing, the price of ETH stands at around $1980, reflecting a nearly 3% decline in the last 24 hours. According to data from CoinGecko, the Ethereum price is down by more than 7% in the past seven days.
Spot Ethereum ETFs Suffer $158 Million In Net Outflows
Merely looking at Ethereum’s apparent demand trend over the past few days, the latest price fall seemed inevitable. According to recent market data, the US-based Ethereum spot exchange-traded funds (ETFs) recorded total net outflows of around $158 million over the past week.
The Ethereum ETFs have been on a seven-day streak of negative outflows, seeing more than $400 million flow in that period. This run of negative performances is a hallmark sign of waning demand in the market, with the downward pressure on price its consequence.
Hence, sustained capital inflows into products like the spot exchange-traded funds could signal a return of demand into the market and perhaps bullish momentum for the Ethereum price.
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Featured image from iStock, chart from TradingView